General Motors became the latest U.S. corporation to have a factory or other asset seized by the government of Venezuela, and the Detroit automaker faces an uphill battle to recover any damages.

GM said Thursday that its only factory in Venezuela was confiscated a day earlier, as anti-government protesters clashed with authorities in a ｃountry that is roiled by economic troubles. GM said assets such as vehicles were taken from the plant, causing it irreparable damage.

The seizure is the latest in a long string of government confiscations of factories and other assets that have been a [feature] of the 21st century socialist revolution in Venezuela started by the late Hugo Chavez two decades ago. Venezuela is currently fighting claims of illegal asset seizures at a World Bank-sponsored arbitration panelfrom more than 25 companies… .

In March, a World Bank arbitration panel determined that Venezuela did not have to pay $1.4 billion to Exxon Mobil Corp. for confiscating company assets during a wave of nationalizations (in Venezuela, the socialist government has been nationalizing — seizing control/ownership of — privately owned companies. Read more under “Background” below the questions).

Auto production in Venezuela has nearly ground to a halt amid the ｃountry’s economic collapse. The cash-strapped socialist government has choked off car companies’ access to dollars needed to import parts and repatriate profits. GM’s factory in the industrial city of Valencia has not produced a single car since 2015. Nationwide, car makers assembled just 2,849 cars last year, from a peak of 172,218 vehicles in 2007.

Despite Venezuela’s grim outlook, many car makers have decided to stay put and avoid the drastic step of shutting down operations to avoid losing market share in case the economy dramatically improves or a more business-friendly government takes power.

GM has about 2,700 workers in Venezuela, where it’s been the market leader for over 35 years. It also has 79 dealers that employ 3,900 people, and its parts suppliers make up more than half of Venezuela’s auto parts market, the company said.

The Venezuelan government had no comment about the GM factory.

In July of last year, the government took control of a factory belonging to Kimberly-Clark Corp. after the U.S. personal care giant said it was no longer possible to manufacture in the crisis-wracked nation due to a lack of materials. President Nicolas Maduro accused Kimberly-Clark of participating in an international plot to damage Venezuela’s economy.

Kimberly-Clark joined Bridgestone, General Mills, Procter & Gamble, Ford Motor Co. and other multinational corporations in scaling back operations in Venezuela. Ford suspended operations at its Valencia plant in December due to slumping sales. Toyota said its lone factory in Cumana, Venezuela, continues to operate normally.

If the government permits it, GM workers at the Valencia plant will get separation benefits “arising from the termination of employment relationships due to causes beyond the parties’ control,” the GM statement said.

Dealers will continue to service vehicles and provide parts, the company said.

… The company recently said that its South America region “remains challenged from macro-economic and political standpoints.” …

ImageSource: https://www.studentnewsdaily.com/wp-content/uploads/2017/04/GM-workers-Valencia-Venezuela_HeraldNet-820x546.jpg" class="img-thumbnail" alt="GM latest US company to have assets seized in Venezuela

VOCABULARY WORDS

1.Asset/noun : a useful or valuable thing, person, or quality.

2.Seize /verb : take hold of suddenly and forcibly.

3.Confiscate/verb : take or seize (someone's property) with authority.

4.Irreparable /adjective : (of an injury or loss) impossible to rectify or repair.